During the past ten years the credit management software landscape has seen many technological changes. From on premise local installations to solutions in the cloud, big data and artificial intelligence, just to name a few. At the end of the day investing in credit management software is all about optimizing the order to cash process, creating greater visibility and making better and faster decisions about customers. However, despite all technical developments, making sure that you get paid on time is still king. The question is how technology can be applied to make sure that customers pay on time, while also maintaining a good relationship. In this interview, I am talking to Jason Braidwood, Global Head of Credit & Collections at Creditsafe Group, about credit management and how BlackLine cloud based SaaS software has helped Creditsafe to streamline their order to cash process and support their credit and collections team.
Can you tell a bit about yourself?
Jason: “At the start of my career, I had totally different aspirations and became a professional football player. Unfortunately, I got a really bad knee injury at a young age, which forced me to pursue another career. So, I carried on and took various business, finance and law exams in the UK. At some point someone offered me a job as a credit controller and I still remember my first question “What is credit control?”. As with many in our profession, I rolled into credit and collections just by accident and started as a credit controller at Euromaster (tires). I really loved the job and my career took off quite quickly. Within three years I became assistant credit manager and fours year after that I got all my qualifications and became credit manager. Now, I have been active in mainly B2B credit management for about 30 years. I worked In different industries such as utilities (electricity, gas), the finance sector (lending, asset management) and the credit reference services business. For the last 9,5 years I have been working at Creditsafe, where I am currently responsible for global credit and collections.”
What do like about working in credit and collections?
Jason: “What I love about credit management is that every day is different. Every day we have new customers. The same goes for collections, because every customer is different. I always say that credit control people are actually just like salespeople, because at the end of the day the process of making a sale brings more or less the same excitement as the moment when a credit controller collects the cash and the cash comes in. Even after 30 years, it is the daily versatility that I still enjoy very much.”
How is credit management set up at Creditsafe?
Jason: “When I joined Creditsafe we only had to deal with five or six different countries. During the past 9.5 years the company has grown massively. At the moment we are operating in 13 countries of which many are in Europe, but we are also active in the US and Japan. As you can imagine, the (AR) ledger has become increasingly bigger and with it our quantity of cash, which has grown tenfold over those years. I look after all those countries in terms of credit risk assessment and credit collections. My main goal is to ensure that outstanding invoices are collected in a timely manner, thus optimizing our cash flow, and also to keep our bad debt to a minimum. It goes without saying that it is quite a big help that we have all credit reports immediately at our disposal.”
Such growth must have had a huge impact on the workload of the credit and collections team, hence to need for automating the order to cash process. Can you elaborate a bit more on the systems that you used in the past and how it looks today?
Jason: “In the past, as a credit team, we used Microsoft Navision (our ERP system) and Microsoft Dynamics as our Customer Relationship Management (CRM) system. We also used Microsoft Excel spreadsheets, working with pivot tables, etc. In hindsight, this was a quite an antiquated way of monitoring collections. It was my manager, our CFO, who asked me if I knew some kind of collections software tool with which we could better streamline our order to cash processes and credit policies across all the different countries. It took us quite a long time to find the right solution. I travelled to many of our offices across the world, just to have a closer look at the different kind of software solutions, but there was nothing available in the market that addressed our specific needs. Ultimately I was approached by an old friend of mine, who got me in touch with BlackLine. He already worked with their solution and he showed me how he used the software. From day one I really liked what I saw and that’s how we started. BlackLine is now at the core of our credit and collections process and it aligns very well with the way how we work locally.”
What were the main reasons to choose the BlackLine solution?
Jason: “ In general, it is the flexibility, adaptability and accuracy of the BlackLine solution that really made the difference for us. Since we work in 13 different countries with often different payment cultures and different order to cash and/or business cycles, the solution allows us to take these differences into account. For instance, the payment culture in Scandinavia is quite different from the payment culture in Italy, so in Italy we have to put more emphasis on the collections process. With BlackLine we were able to implement these differences into the software. I also like that setting up the automation process is rather easy, which also applies to making changes in order to cash procedures. To give you an example, during the COVID19 lockdown period we gave certain customers the possibility to (temporarily) extend their payment terms. For the automation we could easily adjust the customer’s usual terms to the temporary extended terms and automatically monitor them.
Another tool which I am very enthusiastic about is their cash allocation tool. As you can imagine, we have quite a lot of customers and allocating incoming cash across 13 countries at a daily basis was a rather manual and therefore time consuming job. The BlackLine cash allocation tool has streamlined our cash allocation process significantly. Due to the underlying AI technology, the automated match rate on allocations has been sped up tremendously compared to the time we used to spend on this activity in the past. This tool also offers great support for our credit controllers, because the tool allocates incoming payments in real-time. Our credit controllers are now are working with live accounts receivable ledgers which are always up to date, so they can call customers in full confidence that outstanding overdue invoices are indeed not paid yet. In the past we sometimes had to wait 12 to 24 hours before a payment was processed in our system. Ultimately, due to this tool we can avoid making unnecessary phone calls and therefore it makes the work of our credit controllers much more effective, and it also benefits the relationship with our customers.”
You often see some resistance in organizations when new software systems are introduced. How was the adaptation process i.e. how did your credit team respond to the new software?
Jason: “From a user perspective, one of my biggest jobs is to convince the credit control team to start using this product. They were used to working with the old software system and they glorified spreadsheets, but I had to convince them that working with BlackLine was the way forward. Let’s face it, I am not getting any younger and I want my life to become easier as I am getting older. There is always an element of doubt if you are at the start of a transformation process in different countries, but after about four to six weeks everybody really loved the new system. It is a great product to use. Once the team saw how it made many things, including reporting, so much easier and less time consuming we all went for it. For myself, in the past reporting took me three or four days, while now I can deliver the same reports in less than one day. So, BlackLine makes my life much more efficient and the solution also offers me much greater visibility into our performance across all our countries.”
Implementation of software sometimes can be complicated, especially when multiple countries are involved. How did you experience the implementation process?
Jason: “The implementation process was quite challenging, also because it was done during a global pandemic (2020). For projects like this I always prefer face to face meetings instead of online TEAMS meetings. However, overall the collaboration between our project teams, the IT department and the people at BlackLine was really smooth. We had regular, weekly, team meetings and updates on products, where we were in the project and any problems that we may had. Everybody was very upfront with each other. To be honest, we just really worked well as a team and as a partnership.”
Nowadays, underlying technology is much more advanced than say ten years ago. Could you tell me a bit about how you make use of advanced functionalities within BlackLine?
Jason: “Let me say that in credit and collections it is not necessary to be a rocket scientist to set up a solid order to cash framework. As a credit controller, if you want to hit your cash targets, you will have to focus on your highest balances first. I have done a lot of consultancy in my time and I still see people collecting their portfolios alphabetically and this may cause missing out on the really important cases (in terms of risk and/or cash flow). The collection tool of BlackLine stops what I call ‘cherry picking’. The systems automatically assigns a next action date for each case or account, so our credit controllers always have an up to date workflow list (based on this next action date). In my meetings with local credit managers this functionality gives me more focus on predicting future cash flow. For example, I can now easily get an overview of customers who promised to pay, whether they kept or did not keep their promise and what the impact is on our cash (in)flow. The monitoring and reporting functionality also gives our credit controllers a much better focus on who they need to chase instead of who they want to chase. That is a big plus for me, as the system enables us hitting collection targets much quicker than ever before. What is absolutely paramount is what we call the DBT (Days Beyond Terms) , which is an important metric, combined with other customer data, to make accurate predictions about (future) payment behaviour and whether we need to spend more effort and attention on specific customers. Also our DSO has reduced significantly over the months by double digits. The forecasting capabilities of the BlackLine solutions gives me much better insight into were we are with our cash flow and cash targets, which obviously also greatly benefits the reporting to my seniors.”
We are living in challenging times. After the pandemic we are now confronted with rising inflation, increasing interest rates, massive currency fluctuations against the US dollar and international geopolitical tensions, just to name a few. How are you dealing with these uncertainties?
Jason: “Honestly speaking, I was quite worried when during the pandemic we all went into lockdown mode. Nobody really knew what the outcome in terms of cash collection would be. However, despite my worries we’ve done pretty well, but when we came out of the pandemic my worries shifted towards how businesses are going to deal with all the loans that have to be repaid. So far, 2022 has been one of our best years and I am delighted to say that. As any credit manager I also see that the rising interest rates, the Ukraine war, higher energy prices and inflation in general have a massive impact on businesses and credit and collections of every company. At Creditsafe we have set up a think tank with other credit managers to discuss these concerns and we also have regular meetings with our finance teams and senior management on how to address these developments in our policy. For sure 2023 will be another challenging year. With the adaptability that the BlackLine solution provides us, I feel confident that we are well prepared to deal with these challenges in the coming years.”
Do you have any advice for the reader?
Jason: “As I mentioned earlier, I am not getting any younger, so I take any opportunity to make my and my team’s professional life easier. I know there are still many companies out there that do not use dedicated credit management software solutions, but with the knowledge I have today, I have no idea why they are not willing to change. As a credit manager I would honestly advise my fellow credit managers to (re)consider using such tools to streamline their order to cash processes as they can make your and your credit team’s life so much easier in terms of visibility, reporting and insight into the efficiency of your business processes. Also think about the huge benefits of automated cash allocation. Nowadays, in the UK (Creditsafe’s main market) the processing of cash inflows takes less than 90 minutes compared to a full day in the past and it has really helped to enhance the performance of our credit team.”
BlackLine is a Platinum Partner of Credit Expo 2023, which will take place on Thursday 20 april at De Montil in Affligem. If you would like to know more about BlackLine and meet their team in person, you are welcome to visit Credit Expo. In addition, BlackLine will also give two workshops during Credit Expo. Click here to register to visit Credit Expo 2023 (free admission if you are part of the target audience).
Source: Credit Expo